Sales tax return and preparation can be quite complex in some jurisdictions and depending on the line of business (LOB) of an end-user, such as a merchant retailer. The types of taxes that need to be collected, the tax returns that need to be filed, and even the schedules and sections of those returns can vary greatly based on the types of products and services a business sells and the customers they serve. Many state and local taxing jurisdictions have special tax rules and rates for the sale of food, alcohol, tobacco, software, drugs, medical devices, accommodations, services, etc. The tax agencies require special forms and schedules to be filled out and filed to account for these items when reporting sales taxes.
For example, some retailers, but not all, may sell food, which may be taxed differently depending on whether the food is prepared and ready to consume, raw and requires food, and depending on its final usage (for consumption by a consumer or for resale by another business). Some retailers may sell accommodations, such as inns and bed-and-breakfast establishments, which may further include taxable and non-taxable elements of services (dry cleaning, mail processing, long distance telephone, etc.) as well as the possible taxable night of stay.
Depending on the jurisdiction, some items may require multiple taxes to be collected and submitted, such as convention or tourism taxes, environmental or recycling taxes, and concession fees (e.g. airport entrance, etc.). And, there can be a great number of different forms on which each of these taxes may be reported, as applicable. For example, the State of Texas currently lists the following forms as being related to state tax forms and applications, as illustrated in Table 1.
TABLE 1Example Tax Return Forms for One Jurisdiction (Texas)AP-201 Texas Application for Sales and Use Tax Permit and instructionsAP-215 Texas Online Tax Registration Signature Form01-117 Texas Sales & Use Tax Return - Short Form01-114 Texas Sales & Use Tax Return and instructions01-115 Texas Sales & Use Tax Return Outlet Supplement01-116 Texas Sales & Use Tax Return List Supplement01-148 Texas Sales & Use Tax ReturnCredits and Customs Broker Schedule01-922 Instructions for Completing Texas Sales & Use Tax Return01-922(S) Instrucciones para Llenar la Declaracón deImpuestos Sobre las Ventas y Uso01-118 Texas Sales & Use Tax Prepayment Report01-142 Texas Off-Road, Heavy Duty Diesel Equipment Surcharge Return01-143 Texas Fireworks Tax Return01-156 Texas Use Tax Return - to report & pay tax onitems brought or delivered from outside the state into Texas01-339 Texas Sales and Use Tax ResaleCertificate/Exemption Certification01-339-S Certificado de Reventa para elImpuesto Sobre las Ventas y Uso deTexas/Certificado de Exención para el Impuesto Sobre lasVentas y Uso de TexasAP-101 Texas Application for Direct Payment Permit01-119 Texas Direct Payment Return01-116-C Texas List Supplement - for DirectPayment Permit Holders ONLY01-149 Texas Direct Pay Tax Return Credits Schedule01-919 Texas Direct Payment Exemption CertificationAP-168 Texas Application for Customs Broker License01-152 Texas Customs Broker Report01-153 Texas Customs Broker Report--Outlet SupplementAP-153 Texas Application for Maquiladora Export Permit01-126 Texas Maquiladora Return01-374 Maquiladora Exemption Certificate01-157 Texas Special Use Tax Report for Printers01-907 Texas Aircraft Exemption CertificationOut-of-State Registration and Use01-917 Statement of Occasional Sale01-909 Border States Uniform Sale for Resale Certificate00-213 Contribution to Texas Grant and Teach for Texas Loan RepaymentAssistance Programs00-808 Assignment of Security for Texas Tax/Fee01-790 2012 Worksheet for Completing the Sales and Use TaxReturn Forms 01-114, 01-115, and 01-11601-797 2012 Worksheet for Completing the Sales and Use TaxReturn Form 01-117 Sales Tax Refund Instructions00-985 Assignment of Right to Refund01-136 Credit Memo Acceptance01-137 Limited Power of Attorney01-158 Refund Claim for Residential Use of Electricity for RV Parks andCampground Facilities01-911 Sample of Schedule to Support Refunds01-124 Enterprise or Defense Readjustment Project Claim for Refund01-144 Enterprise or Defense Readjustment Project Claim forRefund for Projects Designated on or After Sep. 1, 200101-125 Enterprise or Defense Readjustment Project - Invoices or ContractsSupplement
Additionally, approximately twenty different sales and use tax rate charts are in effect in Texas, and this is just for Texas. Other states are similarly complex, and there can be additional forms for county and city jurisdictions, as well.